Changes in Income Tax Return Forms: MSME Registration Number and Recognition Status Mandatory for Filing New ITR-5 & ITR-6 Effective April 1, 2024
1. Simplification of Tax Procedures for Businesses
- The income tax department has eased criteria for presumptive taxation under Section 44AD of the Income Tax Act, 1961 (“the IT Act”), aiming to simplify tax procedures for businesses.
- A new column for disclosing cash turnover or gross receipts has been introduced in ITR forms 5 and 6, with the cash turnover threshold raised to Rs. 3 crores.
- However, cash receipts must remain below 5% of the total turnover or gross receipts from the previous year to qualify for the relaxed criteria.
2. Additional Requirements for MSMEs in ITR-6 Filing
- Companies using ITR-6 for filing income tax returns now face additional requirements, including the inclusion of Legal Entity Identifier (LEI), MSME registration number, and reasons for tax audit under Section 44AB of the IT Act.
- Disclosure of winnings from online games under Section 115BBJ of the IT Act and virtual digital assets is also mandated in the updated form.
3. Stringent Reporting Mandates for Companies Seeking Refunds
- Companies seeking refunds of Rs. 50 crores or more are subject to stringent reporting mandates, requiring the provision of Legal Entity Identifier (LEI).
- ITR-6 necessitates the inclusion of acknowledgment numbers and Unique Document Identification Number (UDIN) for tax audit reports under Section 44AB of the IT Act and transfer pricing reports under Section 92E of the IT Act.
For more details read Notification No. 16/2024 dated January 24, 2024 and Notification No. 19/2024 dated January 31, 2024